Ideas and discussions about economic and financial literacy issues.
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Tuesday, September 29, 2009

Productivity, Cell Phones and Global Development

One of the things we try to teach our students is that it's not about wages but about productivity. Worker productivity drives the price of labor and, ultimately, the product of labor. This past week, there is a special report on the mobile telecom revolution in The Economist. The main idea is that this relatively small and inexpensive piece of technology is having a significant impact on the lives of people living in less developed economies. Cell phones can even work as small, mobile banks.

There are many things that make the cell phone valuable and significant. But what I find most interesting is its ability to add time and place utility where previously there was none. By connecting people to information in remote areas and at almost any time, they are empowered and can make better decisions. And it makes them more productive by allowing them to match their resources to outside markets, and to get better returns on those resources.

Blog Archive Note

All entries prior to August 15, 2007 appeared on the economic education blog of the Federal Reserve Bank of Chicago. Entries between August 15, 2007 and July 31, 2009 were under the auspices of the Powell Center for Economic Literacy in Richmond, VA.